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Northrop's (NOC) Arm Wins $38M Deal to Support DDG 51 Ships

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Northrop Grumman Corp.’s (NOC - Free Report) business unit, Northrop Grumman Systems, recently secured a $37.8-million contract for repairing items to support the inertial navigation system AN/WSN-7, the AN/BPS-15/16 radar set and bridge navigation systems for Arleigh Burke-class (DDG 51) guided missile destroyers.

The contract was awarded by the Naval Supply Systems Command Weapon Systems Support, Mechanicsburg, PA. Work related to the deal will be performed in Charlottesville, VA, and is expected to be completed by June 2026.

Growing Importance of DDG Ships

The Arleigh Burke-class (DDG 51) guided missile destroyer ships have gained widespread importance within the U.S. Naval forces, particularly because these warships are equipped with Lockheed Martin’s (LMT - Free Report) Aegis Weapon System, a highly integrated naval weapon system. These missile destroyers also contain SH-60 helicopters along with advanced anti-aircraft and land-attack missiles.

Notably, Huntington Ingalls (HII - Free Report) , the largest military shipbuilding manufacturer in the United States, and defense giant General Dynamics (GD - Free Report) co-manufacture the DDG 51 Arleigh Burke-Class destroyer ship for the U.S. Navy.

The DDG 51 Arleigh Burke-class missile destroyers’ importance continues to grow over time as these ships offer a wide range of advanced warfighting capabilities in multi-threat air, surface and subsurface environments. It also offers protection against a wide range of threats, including ballistic missiles.

Our View

Northrop Grumman’s military integrated bridge systems are widely used in U.S. Navy aircraft carriers, cruisers, destroyers, amphibious assault ships, submarines and landing craft, as well as in Coast Guard ice breakers and international naval vessels. Notably, the rising demand for these major warships and submarines will positively impact Northrop Grumman’s growth prospects.

Furthermore, recently in June, the first DDG 51 Flight III destroyer has been launched by Huntington Ingalls, which is expected to provide much-enhanced warfighting capabilities to the U.S. Navy. So, in the near future, we may expect Northrop Grumman to design and provide integrated bridge systems and other important components to the upgraded version of the DDG 51 ship. Such prominent demand trends and favorable projections place Northrop Grumman in an advantageous position in serving the global shipbuilding market.

Price Performance & Zacks Rank

Shares of Northrop Grumman have gained 18% in a year compared with the industry’s growth of 17.2%.

Zacks Investment ResearchImage Source: Zacks Investment Research

Northrop Grumman currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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